FCC Says New TVs Must Be Digital by '07

Technology: Some manufacturers, vowing to fight the order in court, argue that the required tuners could raise prices by $200.

WASHINGTON — Federal regulators on Thursday accelerated the nation's conversion to digital television when it gave manufacturers a 2007 deadline to equip most new sets with tuners that will offer viewers better-quality pictures and enhanced sound.

The Federal Communications Commission's vote may raise the price of new TVs, possibly by as much as $200, even for those consumers who don't want digital TV. Although the move was hailed as a victory for television broadcasters and other Hollywood interests who hope to captivate audiences with digitized images, it was immediately denounced by consumer advocates and many in the electronics industry who vowed to fight the order in court.

"We want the free market to determine what we sell," said Gary Shapiro, president of the Consumer Electronics Assn. "We happen to agree that digital television is a great product. But we don't think the government should tell people that they have to buy it."

The FCC insisted it was acting in the best interest of consumers.

Congress has set a 2006 target date to convert analog television, the current standard, to digital, which will allow for high-definition pictures, clearer sound, more channels and interactivity. That congressional decision could render many of the nation's television sets obsolete without the purchase of specialized hardware to convert them for digital broadcasts.

Thursday's government intervention was needed, advocates said, because electronics makers have been slow to introduce digital TV sets, and progress has stalled. As a result, consumers are purchasing television sets that soon will be outdated.

"This is not a market-oriented policy," said FCC Chairman Michael K. Powell. "We are halfway out in the stream in the canoe. Talk of going back is ridiculous."

Since digital televisions first became available at the end of 1998, Americans have purchased only about 3 million sets, largely because there is a dearth of high-quality digital programming and because the more sophisticated sets can cost thousands of dollars.

But that sluggish demand has created a stalemate of sorts. When broadcasters begin sending more compelling content, TV makers say, consumer demand will increase and manufacturers will respond by making more digital sets. Broadcasters argue that they will produce more digital programs once the audience is larger.

Hoping to jump-start the roll-out of digital television, federal regulators on Thursday ordered TV makers to phase in digital tuners, beginning in July 2004 for TV sets with screens 36 inches or bigger and ending in 2007 for sets as small as 13 inches. The FCC believes the price of digital tuners will drop dramatically as they become more commonplace.

The conversion will allow the government to reclaim the old analog spectrum and use it for other purposes or auction it off for billions of dollars.

But like most issues surrounding the nation's controversial and slow-moving transition to digital television, the ruling raised questions about whether the move will speed progress or spur time-consuming litigation.

The FCC order did not address another key technological hurdle for digital television: cable-box compatibility. Currently 70% of television viewers rely on cable rather than over-the-air transmissions. But there are no standards to ensure that cable boxes are compatible with digital televisions.

For those consumers who get their television from cable or satellite, the new FCC order will have little effect because it applies only to over-the-air broadcasts.

W. Kenneth Ferree, the FCC's media chief, said the commission is working on the cable-box issue, but he could not predict when it might take action.

Republican Commissioner Kevin Martin, who increasingly finds himself at odds with Powell, was the sole vote against Thursday's order. He said he would have preferred to address the cable-compatibility issue rather than single out the electronics industry.

But for Powell, the order was a powerful message about what can happen when an industry refuses to cooperate with his agenda.

In the spring, Powell unveiled a voluntary plan for digital television, setting deadlines for cable, broadcast and electronics industries to speed up the transition.

Though the cable and broadcast industries endorsed the plan, consumer electronics makers--with the exception of Zenith and Thomson--did not, and now they face a government mandate.

In a related matter, the FCC voted to jump into the controversy over copyright protection for digital television. The commission, with the blessing of several lawmakers, said it would consider whether to require TV manufacturers and other electronics makers to ensure that their devices recognize broadcast flag, a copy protection technology.

The FCC is seeking comment by the end of the year on whether it should mandate the technology.